Employees would have to contribute toward PERS under cost-containment bill

Monday, June 5, 2017

Public employees would be required to contribute toward their retirement plans under one of two bills introduced Monday. The long-awaited bills attempt to address the Public Employees Retirement System and state government’s ballooning expenses.

Senate Bills 1067 and 1068 were assigned to the Joint Ways and Means Committee. Hearings have not been scheduled yet.

SB 1068 would make PERS members contribute to “risk sharing accounts.” Senate President Peter Courtney (D-Salem) and Sen. Mark Hass (D-Beaverton), chair of the Senate Finance and Revenue Committee, are chief sponsors of the bill.

The bill would require employees to contribute 1 percent of their salaries to the accounts beginning July 1, 2018. It would go to 2 percent in July 2019 and a variable rate based on the pension funding rate beginning in 2021.

The bill includes directions that the PERS Board shall “determine the amount of savings in employer contributions” attributable to the bill and recalculate employer rates. Rising employer contributions are one of the major cost drivers for school budgets. The bill also provides for an expedited review by the State Supreme Court if challenged.

SB 1067 includes a raft of recommendations to address state costs, including:
• Establishing processes for legislative review of state workforce costs.
• Lowering the state employment cap to 1 percent of the state’s population. Under current law, the state cannot employ more than 1.5 percent of the state’s population from the previous year.
• Reviewing Oregon Lottery costs and rates.
• Collecting on more debts owed to the state.
• Making technical changes to how PERS and the Oregon Educators Benefit Board go about their functions.

Courtney and House Speaker Tina Kotek (D-Portland) are chief sponsors of the bill.

The legal and financial results of the bills are still being analyzed.